(EnergyAsia, May 16 2012, Wednesday) —Cheniere Energy Inc, which is building a liquefied natural gas (LNG) export and trading business in the US, said it has secured a combined US$468 million in new investments from Singapore sovereign wealth fund Temasek Holdings and private equity firm RRJ Capital.
Separately, the three companies have begun discussions to establish a strategic partnership to develop LNG sales, marketing and trading opportunities in Asia, focusing on Cheniere’s proposed liquefaction terminals in Sabine Pass and Corpus Christi.
Cheniere said it will use the proceeds and cash on hand to buy US$500 million of the $2 billion of equity securities to be issued by investment vehicle Cheniere Energy Partners LP that was set up to own and implement the Sabine Pass LNG liquefaction project in Louisiana state. Cheniere Energy owns 88.8% of the Sabine Pass project.
Greg Lanham, Temasek’s Managing Director for Investments, said: “We are pleased to confirm that we have recently agreed to invest in Cheniere alongside RRJ Capital. Cheniere’s established LNG expertise and experience give it the first mover competitive advantage in LNG energy supply.
“This investment helps to expand our longer term interest in the energy and resources sector. We look forward to working with both Cheniere and RRJ Capital and others to tap into opportunities in Asia which are driven by the energy demand of growing middle income populations and continued urbanisation in the decades ahead.”
Richard Ong, chairman and CEO of RRJ Capital, said: “We strongly support Cheniere and their vision to become a world leader in the global LNG industry including the key Asian LNG market.”
Charif Souki, chairman and CEO of Cheniere, said: “Their proposed investment would allow us to increase our equity holdings in Cheniere Partners, which we believe is an attractive long-term opportunity that better aligns us with the Sabine Project and its investors. Additionally, Temasek and RRJ Capital would enhance the further development of our LNG business through their expertise and experience in investments, marketing and trading in Asian markets.”
Incorporated in 1974, Temasek is an Asian investment company headquartered in Singapore. Supported by 12 affiliates and offices in Asia and Latin America, Temasek owns a S$193 billion portfolio as of March 31, 2011 concentrated principally in Singapore, Asia and growth markets.
Operating from offices in Hong Kong and Singapore, RRJ Capital is a US$2.3 billion Asia-focused private equity firm targeting on key growth sectors such as energy, natural resources, financial institutions, consumer and healthcare.
Cheniere is a Houston-based energy company primarily engaged in LNG related businesses, and owns and operates the Sabine Pass LNG terminal and Creole Trail pipeline in Louisiana.
Last month, the company won approval from the Federal Energy Regulatory Commission (FERC) to build an LNG terminal at Sabine Pass with the capacity to export up to 2.2 billion cubic metres a day, or about 16 million tons a year.
When it starts up in 2015, the terminal will ship LNG to Asia where spot LNG prices have held solidly above US$16 per million BTU compared with US$2 to US$2.50 in the US.